Despite ongoing reports that the softening Canadian economy and strong growth of e-commerce are negatively impacting Canadian brick and mortar retailing, the country’s top malls continue to experience increasing productivity. This article precedes our annual study of Canada’s top 20 most productive shopping centres, to be released early next year. 

Canada’s top mall landlords are investing heavily in their properties and in some instances, are spending hundreds of millions of dollars to attract shoppers. This is evident coast-to-coast as landlords such as Oxford Properties, Cadillac Fairview, Ivanhoé Cambridge and others invest to maximize returns on their already highly productive retail spaces. Malls are also investing heavily in marketing and promotion, which includes marketing campaigns ranging from pop-up shops on streetcars to Fashion Santa at Yorkdale Shopping Centre. 

According to Antony Karabus, CEO of HRC Advisory, “the divide between the winners and the others is increasing. ‘A’ malls continue to attract a well-curated assortment of leading Canadian and international retailers following the substantial increases in investment in these malls as they upgrade the malls and food court. As a result, they are able to sharply increase the rents they charge retailers to be in these malls, often up to $300 per square foot annually. The massive increase in capital investments made by landlords in Yorkdale, CF Toronto Eaton Centre, Square One, CF Sherway Gardens, CF Rideau Centre, CF Chinook Centre, West Edmonton Mall, CF Pacific Centre and others are ‘raising the bar’—they are ‘encouraging’ their retail tenants to remodel and upgrade their store designs upon lease renewal, at the same time they are adding much higher occupancy charges to their tenants,” said Mr. Karabus. 

“These landlords are also spending heavily to add new food experiences, upgrade restrooms and common areas, to create a more luxurious experience to attract the kind of customers that will spend heavily at their tenants”, said Mr. Karabus.

Last spring, we conducted a study where we ranked Canada’s top 20 malls by annual sales per square foot. We’ll be releasing new numbers in early 2016 and already, several landlords tell us that their numbers will be considerably higher than last year.  

We spoke with Greg Taylor, General Manager of Oxford Properties-managed Square One Shopping Centre in Mississauga, to gain insight into a shopping centre that is seeing phenomenal sales productivity growth while it continues to expand and renovate. Annual sales at Square One are projected to hit $1,000 per square foot by the end of the year and recently, the mall has seen increases of 10% monthly. Last spring when we released our top 20 malls study, Square One had sales of $910 per square foot, as confirmed by landlord Oxford Properties.

Mr. Taylor described how Square One has recently added several new innovative retailers, including Urban Outfitters, Muji and Canada’s first NYX cosmetics store. Last week, Canada’s fourth technology-savvy Sport Chek flagship opened in the centre. He revealed that retailers Sephora and Zara are particularly strong at the moment, and more high-performing retailers are expected to be added as the centre continues to add new retail space, and improve existing square footage. Since 2013, Oxford Properties has endeavoured to invest $480 million in what will become a 2.2 million square foot shopping centre, second in size only to West Edmonton Mall. 

The mall’s food component, called ‘Food Central’, expanded by 40% in the summer of 2013 and is now seeing sales averaging $2,800 per square foot. Food Central features scullery service to cut down on waste, and the mix of improved seating, better restrooms and enhanced food tenants have all led to its success. 

In the spring of 2016, the mall will see a 113,000 square foot La Maison Simons open in its new north expansion, while a 122,000 square foot Holt Renfrew and a 19,000 square foot Harry Rosen will anchor a new southwest expansion ‘luxury wing’ that will feature upscale retailers such as Kate Spade, Ben Sherman, Marc Cain, Stuart Weitzman, Jamie’s Italian Restaurant, and Wolford, among others. 

Stay tuned for our annual list of Canada’s top 20 most productive shopping centres, to be released in January of 2016. 

*All photos in this article are of Square One in Mississauga, via Oxford Properties. 

Vancouver-based retail industry think tank DIG360 has released its projections for Black Friday 2015. The team has been tracking the shopping phenomenon since 2010, and last year we reported its findings (with the assistance of Ipsos) that showed about a quarter of all adult Canadians made Black Friday purchases in 2014. DIG360’s 2015 findings will be released the week of December 7, according to founder David Ian Gray. 

DIG360’s 2015 projections include the following:

1. Most large and small retailers in Canada have planned well in advance for Black Friday (and weekend) to kick off Holiday selling in 2015; and we have noted the pre-emptive Black Friday promotions beginning earlier in the week.
2. Retailers continue to teach us to wait; more than 1/4 of adult Canadians are expected to postpone Holiday shopping until this weekend, based on an expected increase over 2014 behaviour.
3. The proportion of Canadians 18 and older actively shopping Black Friday plateaued at 51% browsing or buying in 2014, according to the DIG360 – Ipsos Black Friday Canada Tracker,
4. The average Black Friday weekend spend in 2014 was $296 (52% of Canadians spent between $101 and $500) — will those who shop in 2015 spend more? DIG360 expects a 5-8% gain.
5. It remains to be seen which retail chain will now “own” Black Friday and Boxing Day; with Future Shop no longer on the scene, can Best Buy take that position? 
6. Shoppers will continue to be underwhelmed by the breadth and depth of the deals; retailers will continue to protect margins and sell close to regular price as far into the Season as possible.
7. Boxing Day will continue to be our core clearance day (and some American retailers will continue to explore Boxing Day as a new promotion in the U.S.).
8. The low Canadian dollar will mean a drop in cross-border Black Friday shopping (online and offline), and
9. From a consumer perspective, Cyber Monday is fast becoming meaningless since the extended Black Friday is now firmly online as much as offline. 

Last year’s joint DIG360/Ipsos study found a remarkable 98% Black Friday awareness, up from 97% the year before and considerably less in 2010. Despite this, the majority of respondents didn’t shop Black Friday. 

“Tracking since 2010 we see 2014 as a plateau in Canadian Black Friday”, said Mr. Gray last year, “and this should hold in 2015, barring an economic upturn. Furthermore, I’m not anticipating any shift to broader and deeper discounting by retailers in future years, which in fact would be bad for business this early in the Holiday Season”. The data complements anecdotal reports that shoppers are not seeing the deals expected given the pre-Black Friday ‘hype’ in 2014.  Even so, Mr. Gray points out that even this minority buying means Black Friday is entrenched here as one of the most significant shopping weekends in Canadian retail. 

“One of the more interesting changes in our data was that more Canadians are shopping from online Canadian websites for Black Friday sales”, explained Ipsos Executive Vice President Michael Rodenburgh. Last year 38% of Canadian Black Friday shoppers shopped at an online Canadian website for Black Friday deals while this year it increased to 42%. Mr. Gray explained that “the increase may be inline with the continued growth in online shopping in Canada”.

In terms of its impact on other purchasing over the November-December period, the study found 26% of those participating in Black Friday had postponed purchases until they could see what Black Friday offered.  That should increase in 2015, as retail continues to train the shopper to wait. Furthermore, 41% of Canadians browsing or buying Black Friday weekend were mostly shopping for themselves, suggesting there is plenty of Holiday shopping still to come in December.  

For more on last year’s study, visit DIG360.com, and stay tuned for its 2015 findings.

New details have emerged regarding Saks Fifth Avenue‘s first Canadian locations. Two new luxury boutiques have been revealed, both to be located in what Hudson’s Bay Company CEO Richard Baker recently described as being “the single most luxurious department store in Canada”. Saks’ first Canadian locations are scheduled to open in February, though there will be a delay in opening its food halls. 

A recent City of Toronto application, brought by parent company Hudson’s Bay Company on behalf of Saks, indicates that a Louis Vuitton shop-in-store will locate within the new Queen Street Saks at CF Toronto Eaton Centre. This will be Louis Vuitton’s third downtown Toronto location and the fourth for the city. Vuitton’s Toronto stores include a freestanding flagship ‘Maison’ at 150 Bloor Street West, as well as concessions within Holt Renfrew locations at 50 Bloor Street West and at Yorkdale Shopping Centre. It will also be the ninth Vuitton store for all of Canada, joining a freestanding unit in Vancouver and Holt Renfrew-housed Vuitton shop-in-store concessions in Vancouver, Calgary, Edmonton, and at Ogilvy in Montreal. 

Recently, Urban Toronto‘s ACT7 found a job posting indicating that pricey timepiece and jewellery brand Piaget is opening a boutique at Saks in Toronto. This will be the first Piaget boutique for Saks Fifth Avenue as well as Piaget’s first Canadian boutique. Priced into the thousands, Piaget watches and jewellery can be found at top Canadian jewellers including Chateau D’Ivoire in Montreal, Royal de Versailles and Raffi Jewellers in Toronto, and at Siba Jewellers in Vancouver. Piaget has five freestanding U.S. locations in Beverly Hills, Costa Mesa CA, Las Vegas, Miami and New York City. It also retails in selected stores and according to Piaget’s website, several Neiman Marcus stores carry the brand, but not Saks. 

Piaget has since confirmed intentions to open in Saks, as well as possibly a freestanding Canadian store. 

Saks Fifth Avenue President Marc Metrick visited Toronto this week, and spoke to journalists about Saks opening in Canada. He confirmed designers Saint Laurent Paris, Stella McCartney and Givenchy would be carried, and other sources indicate that Saks will feature a roster of designers that will include women’s ready-to-wear by Oscar de la Renta, Lanvin, Emporio Armani, Valentino Carolina Herrara, and others. Most designers are also carried at Holt Renfrew on Bloor Street West in Toronto, while Nordstrom is expected to carry several when it opens at CF Toronto Eaton Centre next September. 

Saks Fifth Avenue’s Canadian flagship is scheduled to open on February 18, 2016. The 163,000 square foot store will span four floors in the eastern portion of CF Toronto Eaton Centre’s massive Hudson’s Bay building. The new Saks will feature personal shopping suites in its Fifth Avenue Club on the third floor, as well as a 21,000 square foot basement food hall operated by Pusateri’s Fine Foods. Connected to Pusateri’s will be a three-level, 11,000 square foot food experience operated by Oliver and Bonacini. Pusateri’s opening will be delayed by up to two months, according to sources, as structural issues with the building were recently discovered during construction. We were recently provided plans and renderings, posted below. 

Saks Fifth Avenue’s second Canadian location will open on February 25 of 2016 at Toronto’s CF Sherway Gardens. The 150,000 square foot three-level store will also feature an 18,500 square foot Pusateri’s-operated food hall. Sherway’s Saks will locate in part of the mall’s former 225,000 square foot Sears space, with most of the remaining space going to a multi-level flagship Sport Chek store. Below is a floor plan of the food hall and renderings. 

Ultimately, Saks Fifth Avenue is expected to open seven or eight Canadian Locations. Mr. Metrick told the Toronto Star that another Saks location is close to a deal and is expected to open in 2017. The company has indicated that Montreal and Vancouver are both target cities for the retailer, and that a Calgary store could also be in the works. Some are already speculating that Mr. Metrick’s comments about a 2017 store opening were referring to a Saks location at Calgary’s CF Chinook Centre, replacing a former 115,000 square foot Target location. 

As well, Saks’ discount Saks OFF 5TH will open approximately 25 Canadian locations over the next several years, with its first scheduled to open in the spring of 2016. So far Saks has confirmed OFF 5TH locations in Ottawa, Niagara-on-the-Lake, Vaughan ON and Calgary, and sources say that more locations have been secured, with announcements expected to be made shortly for British Columbia as well as a second Alberta location. 

A recent study conducted by the University of Alberta School of Retailing‘s Applied Research department is now available free of charge. The Applied Research group is also available to do customized research, tailored to individual client needs. 

The study examined current and proposed grocery store locations in seven Canadian urban centres, as well as mapped out potentially underserved areas which may benefit from new grocery stores. The study specifically analysed high-density inner-city areas in Vancouver, Calgary, Edmonton, Winnipeg, Toronto, Ottawa and Montreal. Existing and proposed grocery stores are mapped with a 500 metre radius trade area, and opportunities for new grocery stores were examined based on a lack of nearby grocery stores, taking into account current and projected populations. 

The study found exceptional inner-city grocery store availability in Vancouver, Toronto and Montreal, with less in the other four cities studied. New grocery stores are proposed in all cities’ urban cores, particularly in Calgary, Edmonton and Toronto. All seven Canadian cities have opportunities for new grocery stores, as revealed in the study.

You may download the entire PDF study here. 

For more information on the University of Alberta School of Retailing Applied Research and to inquire about retaining services, contact Craig Patterson at: clpatter@ualberta.ca or visit its website, www.sorappliedresearch.com.